Ofgem E-Serve has shortlisted four bidders this week to own and operate over £1bn of high-voltage transmission links for three offshore wind farms.
Construction giant Balfour Beatty and operator National Grid amongst the shortlisted firms which has been narrowed down from eight since January’s first round of tenders.
The shortlisted bidders for the second tender round are competing to own and run connections to the Gwynt y Môr, Lincs and London Array (phase 1) offshore wind projects. These are three of the UK’s largest offshore windfarms, representing over 1.4GW of renewable power.
Preferred bidders for links will be announced from autumn 2011. Ultimately the winning bidders will then own and operate the links for the next 20 years.
This follows strong competition for the first tender round which attracted almost £4bn worth of investment appetite to own and operate £1.1bn worth of links.
Ofgem says that the first round resulted in estimated savings of £350M.
“Competitive tendering will ensure that these wind farms can be connected at a lower cost to customers,” Ofgem E-Serve’s Managing Director, Commercial, Robert Hull.
- Balfour Beatty Equitix
- Blue Transmission (Macquarie Capital Group, Barclays Infrastructure Funds Management and Mitsubishi)
- National Grid Offshore
- Transmission Capital Partners (Transmission Capital Partners and International Public Partnerships)
The shortlisted companies are bidding to become Offshore Transmission Owners (OFTOs) which will take over ownership of the links and receive a stable, regulated income for 20 years.
Ofgem expects to announce the preferred bidders for the Lincs and London Array (phase 1) projects in autumn 2011. The preferred bidder for Gwynt y Môr will be selected later than the bidders for the other two projects, as construction is not as far advanced.
Tenders for a further three projects in a follow up stage (Tranche B) to the second tender round - Humber Gateway, West of Duddon Sands and Race Bank - are expected to start next spring. In total these six projects represent around £2bn of offshore transmission links connecting some 2.8GW of offshore wind.
The news follows Ofgem’s announcement last month that Transmission Capital Partners has secured the first offshore transmission owner licence for the Robin Rigg wind farm. Robin Rigg was one of the projects in the first tender round.